Umbrella Reinsurance
Definition of "Umbrella reinsurance"
Protection for all classes of business including automobile, fire, general liability, homeowners, multiple peril, burglary, and glass, by combining the contracts for these classes of business into one reinsurance contract. This enables the cedant to obtain reinsurance more cheaply, with greater capacity, and with greater spread of risk. An umbrella reinsurance contract is offered to one set of reinsurers who all take a fixed percentage of every treaty in the contract. One reinsurer may take 5% across the board, another may take 10%, and so on, until the umbrella contract is totally placed. All the treaties that compose the umbrella contract are written as one block of business; hence, the reinsurers are prohibited from choosing which treaty they want to reinsure. By combining all the reinsurance treaties into one contract, if a catastrophe loss results, each reinsurer will assume only a percentage of the loss instead of assuming the entire loss by itself.
Popular Insurance Terms
Rules stating that every administrator of a qualified pension plan, profit sharing plan, section 401 (K) plan salary reduction plan), section 403(b) plan, and stock bonus plan must provide ...
Insurance company that is a member of a rating bureau. The insurer usually joins such an organization when its statistical experience in a given line of insurance is not sufficient for it ...
Property damage resulting from aircraft traveling faster than the speed of sound. Although the vibrations caused by such high speed can cause damage, it is excluded on most property forms. ...
Investment risk associated with the psychology of the market in that emotions affect the price of a company's stock that, in most instances, has nothing to do with the current or potential ...
Technique of risk management (better known as retention or self insurance) under which an individual or business firm assumes expected losses that are not catastrophic losses through the ...
Insurance protection written in the form of a single line policy. ...
Diagram of cause and effect relationships, showing the possible outcomes if a particular course of action is taken or continued. This method of analysis, which is founded in the testing of ...
Coverage in event of damage or destruction of animals that are being shipped. ...
Plan wherein total withdrawal or income payments from tax deferred savings plans exceed $150,000 in any one year. An excess distribution tax of 15% of the amount greater than $150,000 must ...
Have a question or comment?
We're here to help.